In his resignation letter Jobs tells that board that "I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know. Unfortunately, that day has come."

Photos: Steve Jobs & iPad 2

Jobs was diagnosed with pancreatic cancer in 2004. He has undergone a liver transplant and taken extended leaves from Apple.

Jobs told the board he strongly recommends as his successor Timothy D. Cook, the company's chief operating officer and the interim head of the company during Jobs' extended medical leaves.

"I believe Apple's brightest and most innovative days are ahead of it," he wrote.

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In after-hour trading, Apple shares fell 7 percent in the minutes after the news broke.

The impact of Apple on California's economy is significant. As Prop Zero blogger Joe Mathews pointed out in a recent posting, "California agricultural industry, the largest of any state, is a worldwide force. It represents a little more than 2 percent of the state's GDP. And Apple? It represents 4 percent of the state's GDP."

Here's the complete resignation letter from Jobs to the board:

To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meetmy duties and expectations as Apple's CEO, I would be the first to let you know. Unfortunately, that day has come.

I hereby resign as CEO of Apple. I would like to serve, if the Boardsees fit, as Chairman of the Board, director and Apple employee.

As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.

I believe Apple's brightest and most innovative days are ahead of it.

And I look forward to watching and contributing to its success in a new role.

I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.